which console device do you use ? jtag or rs232?
In kernel menuconfig, you should select either jtag uart or serial uart for console device (but not both).
Device Drivers ---> Character devices ---> Serial drivers --->
if you use jtag uart (with a USB Blaster cable) on a nios2-terminal,
[ ] Nios serial support
[*] Altera JTAG UART support
[*] Support for console on Altera JTAG UART
if you use serial uart (with a 9-pin RS-232C cable) on a terminal emulator such as minicom or ckermit,
[*] Nios serial support
[*] Support for console on Nios UART
[ ] Altera JTAG UART support
The console device will use /dev/console node.
Yes, you need to create all /dev nodes or copy them from initamfs.
Do you get the shell prompt?